ETI Finance issues statement to clarify misinformation

The ETI Board of Directors, in a statement, said it is deeply concerned regarding the recent baseless allegations made in certain newspapers and electronic media regarding the sale of Swarnamahal Jewellers Ltd., EAP Films and Theatres Ltd., and EAP Broadcasting Company Ltd. to Ben Holdings Ltd. and Blue Summit Capital Management Ltd. Following is the statement.

The said companies and corresponding assets are private interests. Therefore, this sale is at the complete discretion of the original owners subject to ensuring that the proceeds realised are entirely utilised to settle the depositors. The mandate of the Central Bank, in this regard, is in protecting the interests of the depositors of ETI Finance Ltd. by obtaining the maximum value from the sale.  

The statement signed by ETI Finance Chairman Jeewaka Edirisinghe said the process for the sale of ETI assets commenced in 2015. Despite numerous negotiations, there were no firm offers made by the parties with whom the owners had discussions. 

On 19 December 2017, Shri Krishna Investments Ltd. offered the equivalent of $ 61 million in rupees. Upon inquiry, this company was in the process of being incorporated (and remains at this same stage to date) and had no visible financial background. On this basis, the owners of ETI informed the Central Bank that it would not be pursuing this offer.  

The current owners expressed their interest in purchase the aforesaid companies and their assets in December 2017. The offer was to purchase the assets of ETI and not the ETI company itself and accordingly, due diligence was commenced on the assets of ETI. 

The owners of ETI, with the guidance of the Central Bank, commenced serious negotiations with the representatives of the new owners and requested a good faith deposit amounting to Rs. 400 million, which was paid. 

On completion of the financial and legal due diligence, a final negotiated price was arrived at. Upon reaching agreement on a price, a sum of $ 54 million has been received to date. The entire proceeds received thus far were paid to ETI and utilised to settle deposit holders. The balance is to be completed before the end of this month. 

Prior to entering into the definitive agreement with Blue Summit Capital Management Ltd., all relevant documents were submitted to the Central Bank and our bankers to carry out the required checks and balances. All contracts with the current owner were signed only after receiving the necessary clearance from the regulator. No credible evidence has been received to date to indicate that Blue Summit Capital Management Ltd. is or was a blacklisted company.  

The entire transaction and all the payments that have been effected to date have been subject to the close scrutiny of the Central Bank, which is guided by strict anti-money laundering provisions. 

We wish to reiterate that the entire transaction was carried out as per the laws and regulations of Sri Lanka and we are dismayed at the baseless allegations made by interested parties who do not wish the transaction to proceed and have no sympathy towards settling the depositors. It must also be stated that the timely investment on the part of the new investors has not only eased the burden of the depositors but resuscitated the ailing businesses, providing job security and career growth for over 850 staff members across several companies.